retail news in context, analysis with attitude

Published on: July 26, 2011

by Michael Sansolo

While life is far from perfect in our modern world, it’s simply amazing how easy some things have become. The problem is, we don’t always see that. Imagine for a second that you have to go a full day without your cell phone, your high-speed Internet connection or, heaven forbid, air conditioning during this summer especially. Life would suddenly feel a whole lot different wouldn’t it?

Yet it’s hard to break away from the every day and see things differently—say, look at a modern supermarket the way our shoppers see it. We see them as a paragon of modern convenience, with a perfect layout, ease of shopping and all the right messages coming through. But shopper experiences and perspectives can be very different and sometimes we need to look through their eyes.

Last week I had a chance to experience how expectations have changed something I experience regularly. It happened far from a supermarket, but I think the lesson holds up.

As readers of this column know, I love baseball and (like Kevin) make it a point to get to games whenever my travel schedule allows it. While I love many modern baseball stadiums, I don’t always like the experience. To attract less knowledgeable fans to a game many believe drags on far too long, stadiums have added all kinds of distractions. These days, video screens show replays and comedy routines. There are all manner of contests among fans. There are t-shirt cannons, “kiss” cameras, children running the bases and special mascots racing around the outfield.

Despite myself, I’m something of a baseball snob looking at such events and asking why we can’t watch a simple game. But we really can’t anymore.

Last week I watched the Los Angeles Angels of Anaheim play in their 50-year-old stadium that now is one of the sport’s five oldest and I found myself missing the trappings of newer stadiums. From my seat I could watch the game wonderfully, but I couldn’t find the endless array of information that comes in newer parks. I couldn’t easily keep track of each player’s performance that night; couldn’t quickly track scores from around the league; and couldn’t learn the speed and type of pitch being thrown.

So what does a 78-mile per hour change up have to do with stores? I’d suggest everything.

Like it or not, our customers have grown accustomed to a whole range of new “givens” in their lives. They know they can find even the most obscure piece of information on Google or the most unpopular product on Amazon. They can be dazzled by countless store at the mall or endlessly entertained at the local ballpark. So what happens at the supermarket?

Well, the foods are stunning and the stores nicer than ever, but there are shortcomings. Most supermarkets I visit fail to give me the information I need about new produce items, such as what they taste like, how to serve them and how to pick one properly. On Google I’m a master of the information universe; at the mango display, I’m lost.

We need to remember that our shoppers come armed with their collection of experiences and expectations from every place they shop. Whether it’s the fashion-laden offerings of clothing stores or even the cool vibe of an Apple store—it’s all in their minds when they walk in our doors. Like it or not we compete with all those experiences daily because like it or not, that’s what they now expect.

One more thing to worry about.

Michael Sansolo can be reached via email at msansolo@morningnewsbeat.com . His book, “THE BIG PICTURE: Essential Business Lessons From The Movies,” co-authored with Kevin Coupe, is available by clicking here .

Published on: July 26, 2011

by Kevin Coupe

Companies define leadership in different ways. Indeed, leadership can be personified in different ways.

With that in mind, it was interesting to read the New York Times story about a leader at a company that has little directly to do with retailing, but where the guy in charge is setting the tone in a unique way:

“Power in Hollywood is usually telegraphed in the least subtle way possible. People hopscotch to meetings by helicopter (Ryan Kavanaugh of Relativity Media), camp courtside at Lakers games (Jeffrey Katzenberg) and build HBO series around their antics (the superagent Ari Emanuel).

“Then there is Kevin Feige’s approach.

Preening at the Polo Lounge? Mr. Feige, president of Marvel Studios, would rather go unnoticed in a darkened movie theater or in the aisles of a comic book shop. He lives in lumpy zip-up sweatshirts and his office is little more than a laptop. A favorite vacation spot is Walt Disney World, where he sweats in line like everybody else.

But make no mistake. Over the last few years, Mr. Feige, 38, has become one of the most powerful people in movies.

“Though Warner Brothers and its DC Comics unit have strained to turn their lesser-known superheroes like Green Lantern into film stars, Mr. Feige has been on a tear. His two Iron Man movies sold over $1.2 billion in tickets worldwide; a third arrives in 2013.

Thor, the potentially ridiculous tale of a pseudoviking with a magic hammer who can travel by rainbow, took in $445 million since opening in May. And over the weekend Captain America: The First Avenger sold a stout $65.8 million in tickets; a sequel is already in the works.

“Mr. Feige has accomplished this by maintaining a careful balance of conservatism and risk. In an industry that loves to fiddle, he actually sticks close to the original material, recognizing that there is a reason Marvel characters like Iron Man attracted fans in the first place. But Mr. Feige also makes unusual bets on untested actors and hires directors who would give many studios serious pause.”

You can read the whole piece here. It is interesting, and an Eye-Opener about leadership styles. Sometimes, you don’t have to be swinging Mjölnir to be a leader.

Published on: July 26, 2011

Forrester Research is out with a new study saying that the use of tablet computers such as the iPad for online shopping is increasing at such a rate that it could someday be a more popular way of doing e-commerce than the use of smart phones or personal computers.

The research suggests that while only nine percent of consumers own tablet computers, these tablets are responsible for one of five dollars spent online, and six out of ten tablet owners have used them to buy things over the internet.

“Everyone thinks that mobile phones and mobile commerce are the next big things, and I think what this data shows is it’s probably actually tablets,’ Sucharita Mulpuru, an e-commerce analyst at Forrester who co-wrote the report, tells the New York Times. “We have always capped e-commerce at 10 to 15 percent of total retail sales, but this potentially has the capability of really expanding e-commerce much beyond that.”

The Times reports that “forty percent of tablet owners use their tablets instead of their personal computers when both are available, Forrester found. And though more people are shopping on smartphones, they use them mostly for comparing prices and receiving mobile coupons, and get frustrated by the small screen when browsing items or entering billing information. A majority, particularly young people, prefer shopping on tablets, the report said.”

However, Forrester also suggests that retailers have generally not responded to this trend with websites that are optimized for tablet computers.

Published on: July 26, 2011

The internet is abuzz with chatter about a 2,343-word resignation email sent by a Whole Foods employee to the retailer ... a copied to every other employee in the company ... in which he accuses Whole Foods of being insincere, inauthentic, and of being a “faux hippy Walmart.”

As the Washington Post reports, the email has “spread its tendrils throughout the Internet” with its “accusations that the firm mistreats and underpays employees, allows customers to abuse staff, and doesn’t live up to its corporate ideas.

“When the employee was hired more than five years ago years ago, ‘I appreciated and respected what the company said it's philosophies were at that time ... However, it didn't take long to realize what complete and utter [expletive] they are’.”

Whole Foods has responded to the controversy with its own email: “We disagree with the former team member’s statements and we wish him the best of luck in his future endeavors.”

Published on: July 26, 2011

The New York Times had a piece looking at a subject that has been a favorite topic here on MNB - the necessary revamping of the United States Postal Service.

According to the story, “Lawmakers on both sides of the aisle agree that the Postal Service needs revamping. Five overhaul bills have been introduced — two by Republicans and three by Democrats — with proposals addressing issues like  the actuarial assumptions for employees’ retirement benefits and the viability of Saturday deliveries.

One Senate bill would “grant the Postal Service much of what it wants, including the ability to tap into surpluses in its retiree benefits funds, which would maintain solvency in the short term. It could also allow the Postal Service to ship wine and beer, close more unprofitable post offices and eliminate Saturday deliveries.”

Another bill, in the House of Representatives, “proposes letting the Postal Service default on its obligations and then establishing a regulatory body with a broad mandate to restructure the organization. The bill would also allow the elimination of Saturday deliveries, the use of postal vehicles and properties for commercial advertisements and the establishment of a commission that would operate much like the military base-closing panel in recommending closures of unprofitable post offices.”

Here’s the bottom line, as framed by the Times: “Despite cutting $12 billion in costs over the last four years and eliminating more than 200,000 career positions in the last decade, the Postal Service is expected to lose $8 billion for the second consecutive year as mail volume has dropped by about 20 percent from 2006 to 2010.” And it seems entirely possible that the USPS could run out of money before the end of the year.

Published on: July 26, 2011

• Reuters reports that Walmart “is moving its Vudu video streaming and rental service to a place where it can get attract more eyeballs -- the Walmart.com web site -- as the growing service competes for attention with a variety of video services.

“Adding Vudu to the main Wal-Mart site is the latest way the world's largest retailer is trying to be the go-to destination for shoppers, both in stores and, increasingly, online. Vudu, which Wal-Mart bought last year, streams films and shows to computers, certain televisions, Blu-ray DVD players and Sony Corp's Playstation 3.”

Published on: July 26, 2011

Okay, so the space shuttle program has been shut down. But that doesn’t mean that new and important scientific frontiers are not being pursued.

The Boston Globe reports this morning that a Cambridge, Massachusetts, research company called DuraFizz is leaving no stone unturned as it tries to develop a crispy french fry that can be made without using a deep fryer, something described as “one of the Holy Grails of food science.”

According to the story, “It’s tough to bake potatoes and achieve anything like a proper french fry texture ... And once you dunk a potato in hot oil, it gets fattening fast.

“What DuraFizz has been developing is a healthy fry that’s super-crispy but baked in an oven. The customers they have in mind aren’t just restaurant chains and frozen food producers, but also schools and military installations. The coating they have developed, called Oh So Crisp, uses starches and flours from corn, rice, and potatoes, which form a layer around the potato.

Published on: July 26, 2011

• An editorial scheduled to be published in the August edition of the American Journal of Clinical Nutrition suggests that the emphasis on choice in the US is one of the reasons that the obesity issue that grown in importance, and that a plethora of choices may actually trigger self-destructive behavior by people who suffer from food addiction.

• USA Today reports that while there “are a half-dozen or more lethal forms of E. coli ending up in our meat or on our leafy greens that are so virulent they can send people to the hospital and even kill them,” only one of them, “E. coli O157:H7, is officially termed an adulterant, meaning any raw ground beef that tests positive for it cannot be sold for human consumption.”

The story notes that “there's no requirement that companies test for the other lethal strains, and it's not illegal for them to be in the food. And that, says a growing chorus of lawmakers, food-safety and consumer advocates, needs to change. But attempts by these legislators and interest groups to broaden the types of E. coli strains that are specifically subject to federal regulation so far haven't succeeded.” The good news is that “in the absence of specific federal oversight ... some companies have begun their own testing for these pathogens to protect consumers and their own bottom lines.”

• The Chicago Tribune reports that McDonald’s, “reacting to America's childhood obesity epidemic and blame it receives as the country's largest purveyor of burgers and fries,” plans to announce today that beginning in September, “it will begin serving a fruit or vegetable with every Happy Meal sold in the U.S.” McDonald’s also plans to shrink the french fry servings placed in Happy Meals.

Published on: July 26, 2011

• Dollar General Corp. announced that Kathleen Guion, division president of store operations and store development, plans to retire effective July 31, 2012.

Published on: July 26, 2011

We’ve had some coverage here about the possible connections between the News Corp. phone hacking fiasco in the UK and some legal troubles that Rupert Murdoch’s marketing companies have faced here in the US. This stories led MNB user Scott Simon to write:

A long time since I have written, however I continue to be an avid fan of MNB and believe it is a must read for anyone in the business. I joined News America 7 years ago and have found a tremendous second career here. I wanted to let you know that in my corner of the News Corp. world that the actions in the UK would not be tolerated. NAM is one of the most ethical companies I have ever been affiliated with. Been a rough couple of weeks for the troops but being one of the best has some downside.




There was a story yesterday about how some unnamed company bid to acquire BJ’s Wholesale Club, but that the offer was not even entertained because of antitrust concerns. The mind immediately turns to either Sam’s or Costco - I bet Sam’s - but some MNB users disagreed.

One MNB user wrote:

When is the last time that you heard of Sam's or Wal-Mart buying another chain..? If I had a gun to my head I would say Costco but it just doesn't seem likely. If they were concerned about anti-trust concerns it wouldn't necessarily have to be another club store right? I think quite possibly Ahold. Ahold has off loaded all assets but Stop & Shop, Giant MD and Giant Carlisle…Alternate format may have given them the push they need or for the sake of speculation…What about SVU looking for a format that could be as successful as SavALot and I believe when BJ's first went on block there was much discussion over selling Shaw's….or A&P- let's not forget Burkle still pushes most of the buttons there and it would be just like him to include an asset/format like a BJ's in a roll-up (Smiths, Smittys, Fred Meyer - like). …. Just musing out loud…?




On the subject of Feargal Quinn, defined by another MNB user as an “indispensable man,” we heard from Beatrice Orlandini:

I am very lucky to know Feargal and to have visited Superquinn about 20 times in its great days.

Once Feargal even bagged my small shopping. But he wasn't any nicer to me because he knew me than he was to any of the other customers.

He was and is one of the great charismatic personalities that any business would love to count on.

The moment he started to let go, and this was clear to see even before the official goodbye, everything changed.

In the commitment of the employees, in the air you breathed in the stores.

He was the life of that company.

I agree with you. He is/was indispensable.

Superquinn without Feargal would be like Dorothy Lane Market without Norman and Calvin Mayne.

Could you ever think of it?

Go ask any of their associates.

In very few other companies (maybe not even a handful) would they get the same level of empowerment and be able to display in full their passion for their work.

And where else could customers find the same atmosphere?

I do believe that only great people make really great companies (and stores). Just think of Wegmans...

Well put.

Published on: July 26, 2011

After months of labor discord, the National Football League got back to work yesterday as 32 player representatives voted unanimously to recommend approval of a 10-year contract that team owners approved late last week.

According to the New York Times, rookies can start signing contracts and every other free agent can begin negotiating them Tuesday, when trades can also begin; teams will start opening training camps Wednesday; and Friday, about 400 free agents can begin joining new teams — five months of activity being funneled into just a few weeks.”